In Sales, Cash is King, but Non-Cash Incentives are a Close Second

It’s not a new concept. Post a leader board in the office and everyone notices. No one wants to find their name at the bottom, or even worse, not make the leader board at all.

I’ve had the opportunity to speak with sales reps who have worked for my clients over the past 15 to 20 years. They can share stories of how they never knew where they stood compared to other sales reps until a week or two, or even months, after the sales period ended.

Today, many sales reps can see real-time results through apps and dashboards, with no need for a manager to get involved. With an up-to-the-minute leader board in the palm of their hand, they know where they rank, but oftentimes reps need extra motivation when everyone works remotely and never get to build relationships in the office.

More Perks, Please

A base salary, commission, company car, or ability to work from home may be enough to keep a sales rep focused on achieving a personal bonus or promotion, but sometimes you need to create a healthy tension between reps to ensure goals are met and good behaviors are reinforced.

Two years ago, one of my clients incentivized their sales force with a gamification program to keep their sales team motivated with smaller perks and wins as they worked towards their quota or bonus. The initial program was very successful, but the recognition was for tasks that were not above and beyond the daily grind. The result: a watered-down program where everyone was a winner.

After much thought, the program was reworked. Contests were created for specific levels of employees, as well as providing surprise rewards for specific behavioral changes. Contests had two measuring parts; one portion was driven by sales metrics and the other was based on behaviors such as the reps’ ability to execute calls to their target prospects. Reps were no longer rewarded for just achieving quota, but rewarded for best practices and following protocols within the company. Our client found that this model of recognition fueled further analytics that explore which specific behaviors lead to the most productive sales people, or driving improvements in other departments such as hiring and coaching.

Cash is King, but Non-Cash Comes in a Close Second

When a sales rep receives a cash incentive, it is often paid via direct deposit and forgotten as the cash is co-mingled with money used to pay day-to-day expenses. There is no tangible differentiator for the cash incentive.

Selecting a reward that a sales rep would not buy on their own, something tangible that he or she normally would not splurge on, is often more appreciated.

Non-cash items have been found to be three times more motivational than cash incentives. Receiving an item that is visible provides social reinforcement from others. One example is a company car. Everyone receives the same car, but when you tie in an upgrade to your company car for attaining certain goals, the visibility of attaining that goal is not only a daily reminder to the individual, but to others at the company who see the rep driving the upgraded vehicle.

Another way that non-cash incentives motivate include the status associated with achieving an incentive that is given in public. There is an immediate satisfaction of receiving an item in front of peers that make the incentive more memorable.

Adding an element of choice can further that level of satisfaction. One of our clients holds a quarterly prize drawing, where all sales reps who’ve received at least one behavior-specific recognition are eligible. If randomly selected, the winners are free to choose among several items that they would like to win. Items have included travel vouchers, new technology-based gadgets such as iPads, Apple watches, an iRobot Roomba, or something that can be defined as an extravagant spend that is nice to have, but you would not buy it for yourself. In addition to the experience of winning and enjoying the prize, sales reps also receive company-wide recognition when these prize drawings or non-cash prizes are distributed which has garnered increased engagement among the sales team.

The public nature of these recognition events can fuel a contagion effect. Combined with the element of surprise, they keep sales people on their toes because they know they constantly need to be upping their game if they want to be on the receiving end of the rewards program.

“I still have people telling me how they are going to make improvements so that they can be recognized at the next national event,” said Jason Farley, Director, Sales Operations at Kowa Pharmaceuticals America, Inc. “The introduction of a money tunnel at our national sales meeting for top performers is still being talked about by the sales team and continues to drive top performers.”

Of course, achieving quota is paramount. For those top achievers, prizes have included trips to the Super Bowl, which is a once-in-a-lifetime memory to cherish. Creating goals that motivate, as well as improve the status of a rep within the company, has helped our client reach their goals.

For sales reps, gamification fits like a glove. Salespeople are naturally competitive and love to win, so sales goals that feel like fun games are a successful formula for boosting a sales rep’s drive and engagement. Another thing to consider is that sales teams work in remote settings, which make it easy to lose their daily motivation. That’s where the impact of leader boards come into play. Not only do they reinforce that essential element of competition, but they also provide a forum for managers to showcase their teams’ accomplishments to the entire company.

A Sales Performance Management solution, with an integrated mobile and social app, can keep sales reps feeling connected and part of the team. When gamification was added, 85% of the sales team received recognition within the first quarter and there was no need for shadow accounting. The awards program was implemented within the existing system.

For just pennies on the dollar, the company saw an increase in engagement and productivity: a win-win for the employees and the employer.

If you would like to hear first-hand, how one company incentivized their sales force, check out this webinar recording showcasing best practices for improving non-cash incentive to drive maximum performance and increase sales results.

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Adrienne Arndt

Adrienne Arndt is a Senior Consultant at Optymyze. She collaborates directly with clients in the pharmaceutical industry, developing and designing incentive compensation analytics and reporting. Her experience includes consulting in areas like client training, contest design, gamification, and process standardization.